##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q



|(Mark one)
|----------

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to

Commission file number 0-02517

TOREADOR RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)


|                                         |  |                       
|---------------------------------------- |  | ----------------------
|Delaware                                 |  | 75-0991164            
|                                         |  |                       
|(State or other jurisdiction of          |  | (I.R.S. Employer      
|incorporation or organization)           |  | Identification Number)
|                                         |  |                       
|4809 Cole Avenue, Suite 108              |  |                       
|Dallas, Texas                            |  | 75205                 
|                                         |  |                       
|(Address of principal executive offices) |  | (Zip Code)            

Registrants telephone number, including area code: (214) 559-3933

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

|        |  |         
|------- |  | --------
|Yes [X] |  | No [   ]

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date.

|                                 |  |                                  
|-------------------------------- |  | ---------------------------------
|Class                            |  | Outstanding at September 30, 2002
|                                 |  |                                  
|Common Stock, $0.15625 par value |  | 9,337,517 shares                 





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TABLE OF CONTENTS



|                                                |                                                                                                |                                            |  |  |  |  |  | 
|----------------------------------------------- | ---------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                  
|                                                | ITEM 1  FINANCIAL STATEMENTS                                                                 
|                                                |                                                                                                | CONSOLIDATED BALANCE SHEETS               
|                                                |                                                                                                | CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                                |                                                                                                | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                                |                                                                                                | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                                | ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                | ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                            
|                                                | ITEM 4  CONTROLS AND PROCEDURES                                                              
|PART II. OTHER INFORMATION                     
|                                                | ITEM 1  LEGAL PROCEEDINGS                                                                    
|                                                | ITEM 2  CHANGES IN SECURITIES AND USE OF PROCEEDS  None.                                    
|                                                | ITEM 3  DEFAULTS UPON SENIOR SECURITIES  None.                                              
|                                                | ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  None.                          
|                                                | ITEM 5  OTHER INFORMATION  None.                                                            
|                                                | ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                                     
|CERTIFICATION                                  
|EXHIBITS INDEX                                 
|EX-3.2 Certificate of Designation of Series A-1
|EX-10.1 3rd Amendment to Loan Agreement        
|EX-10.2 4th Amendment to Loan Agreement        
|EX-10.3 Settlement Agreement                   



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##### Table of Contents



TOREADOR RESOURCES CORPORATION

INDEX

|                              |                                                                                               |                                                                                                           |  |             |   | 
|----------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- |  | ----------- | - | 
|                              |                                                                                               |                                                                                                           |  | Page Number
|                              |                                                                                               |                                                                                                           |  |            
|PART I. FINANCIAL INFORMATION |                                                                                               |                                                                                                           |  |            
|                              | Item 1. Financial Statements (Unaudited)                                                      |                                                                                                           |  | 2           |  
|                              |                                                                                               | Consolidated Balance Sheets (Unaudited)
September 30, 2002 and December 31, 2001                          |  |             | 2 | 
|                              |                                                                                               | Consolidated Statements of Operations (Unaudited)
Three and Nine Months Ended September 30, 2002 and 2001 |  |             | 3 | 
|                              |                                                                                               | Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2002 and 2001           |  |             | 4 | 
|                              |                                                                                               | Notes to Consolidated Financial Statements                                                                |  |             | 5 | 
|                              | Item 2. Managements Discussion and Analysis of Financial
Condition and
Results of Operations |                                                                                                           |  | 13          |  
|                              | Item 3. Quantitative and Qualitative Disclosure about Market Risk                             |                                                                                                           |  | 19          |  
|                              | Item 4. Controls and Procedures                                                               |                                                                                                           |  | 20          |  
|PART II. OTHER INFORMATION    |                                                                                               |                                                                                                           |  |            
|                              | Item 1. Legal Proceedings                                                                     |                                                                                                           |  | 21          |  
|                              | Item 2. Changes in Securities and Use of Proceeds                                             |                                                                                                           |  | 21          |  
|                              | Item 3. Defaults Upon Senior Securities                                                       |                                                                                                           |  | 21          |  
|                              | Item 4. Submission of Matters to a Vote of Security Holders                                   |                                                                                                           |  | 21          |  
|                              | Item 5. Other Information                                                                     |                                                                                                           |  | 21          |  
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                           |  | 21          |  
|                              | Signatures                                                                                    |                                                                                                           |  | 22          |  
|                              | Certification of G. Thomas Graves III                                                         |                                                                                                           |  | 23          |  
|                              | Certification of Douglas W. Weir                                                              |                                                                                                           |  | 24          |  

1



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##### Table of Contents






PART I. FINANCIAL INFORMATION




|         |                     
|-------- | --------------------
|ITEM 1  | FINANCIAL STATEMENTS




TOREADOR RESOURCES CORPORATION

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |              |       |        |        | 
|-------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------------ | -------------------------------------------------------- | ----- | --------------------------------- | ------ | ------------ | ----- | ------ | ------ | 
|                                       |                                                                                          |                                              |                                            |                                                          |       | September 30,                     |        | December 31,
|                                       |                                                                                          |                                              |                                            |                                                          |       | 2002                              |        | 2001        
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          |                                              |                                            |                                                          |       | (in thousands, except share data)
|ASSETS                                 |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|Current assets:                        |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          | Cash and cash equivalents                    |                                            | $                                                        | 677   |                                   |        | $            | 2,155 |       
|                                       |                                                                                          | Accounts and notes receivable                |                                            |                                                          | 3,774 |                                   |        |              | 3,456 |       
|                                       |                                                                                          | Available-for-sale securities, at fair value |                                            |                                                          | 74    |                                   |        |              | 348   |       
|                                       |                                                                                          | Unrealized gains on commodity derivatives    |                                            |                                                          |      |                                   |        |              | 993   |       
|                                       |                                                                                          | Other                                        |                                            |                                                          | 2,533 |                                   |        |              | 1,151 |       
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          |                                              | Total current assets                       |                                                          |       | 7,058                             |        |              |       | 8,103  |       
|                                       |                                                                                          |                                              |                                            | Properties and equipment, net, successful
efforts method |       |                                   | 69,141 |              |       |        | 78,028 | 
|Investments in unconsolidated entities |                                                                                          |                                              | 2,753                                      |                                                          |       |                                   | 2,855  |             
|Income taxes receivable                |                                                                                          |                                              | 702                                        |                                                          |       |                                   |       |             
|Goodwill                               |                                                                                          |                                              | 5,671                                      |                                                          |       |                                   | 5,076  |             
|Other assets                           |                                                                                          |                                              | 503                                        |                                                          |       |                                   | 392    |             
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          |                                              | Total Assets                               |                                                          | $     | 85,828                            |        |              | $     | 94,454 |       
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|LIABILITIES AND STOCKHOLDERS EQUITY   |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|Current liabilities:                   |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          | Accounts payable and accrued liabilities     |                                            | $                                                        | 6,101 |                                   |        | $            | 6,078 |       
|                                       |                                                                                          | Unrealized loss on commodity derivatives     |                                            |                                                          | 1,418 |                                   |        |              |      |       
|                                       |                                                                                          | Current portion of long-term debt            |                                            |                                                          | 2,700 |                                   |        |              | 2,625 |       
|                                       |                                                                                          | Income taxes payable                         |                                            |                                                          | 571   |                                   |        |              | 279   |       
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          |                                              | Total current liabilities                  |                                                          |       | 10,790                            |        |              |       | 8,982  |       
|Long-term debt                         |                                                                                          |                                              | 31,967                                     |                                                          |       |                                   | 36,874 |             
|Deferred tax liability                 |                                                                                          |                                              | 11,507                                     |                                                          |       |                                   | 12,883 |             
|Convertible debenture                  |                                                                                          |                                              | 2,160                                      |                                                          |       |                                   | 2,160  |             
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          |                                              | Total liabilities                          |                                                          |       | 56,424                            |        |              |       | 60,899 |       
|Stockholders equity:                  |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       | Preferred stock, $1.00 par value, 4,000,000
shares authorized; 160,000 issued            |                                              |                                            | 160                                                      |       |                                   |        | 160          |      
|                                       | Common stock, $0.15625 par value, 30,000,000
shares authorized; 10,058,544 shares issued |                                              |                                            | 1,572                                                    |       |                                   |        | 1,572        |      
|                                       | Capital in excess of par value                                                           |                                              |                                            | 29,656                                                   |       |                                   |        | 29,593       |      
|                                       |                                                                                          | Retained earnings                            |                                            |                                                          | 834   |                                   |        |              | 4,617 |       
|                                       | Accumulated other comprehensive income (loss)                                            |                                              |                                            | (284                                                     | )     |                                   |        | (33          | )    
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          |                                              | 31,938                                     |                                                          |       |                                   | 35,909 |             
|                                       |                                                                                          | Treasury stock at cost:                      |                                            |                                                          |       |                                   |        |              |       |       
|                                       |                                                                                          |                                              | 721,027 and 681,027 shares                 |                                                          |       | (2,534                            | )      |              |       | (2,354 | )     
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          |                                              | Total stockholders equity                 |                                                          |       | 29,404                            |        |              |       | 33,555 |       
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             
|                                       |                                                                                          |                                              | Total Liabilities and Stockholders Equity |                                                          | $     | 85,828                            |        |              | $     | 94,454 |       
|                                       |                                                                                          |                                              |                                            |                                                          |       |                                   |        |             

See accompanying notes to the consolidated financial statements

2



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TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |        |        |  
|---------------------------------------- | -------------------------------------------------- | ---------------------------- | ------ | ------------------------------------- | ------ | ----------------- | ---- | ----- | ----- | ---- | ------ | ------ | ------ | - | ----- | ------ | ------ | -
|                                         |                                                    |                              |        | Three Months Ended                    |        | Nine Months Ended
|                                         |                                                    |                              |        | September 30                          |        | September 30     
|                                         |                                                    |                              |        |                                       |        |                  
|                                         |                                                    |                              |        | 2002                                  |        | 2001              |      | 2002  |       | 2001
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |     
|                                         |                                                    |                              |        | (in thousands, except per share data)
|Revenues:                                |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|                                         | Oil and gas sales                                  |                              | $      | 5,800                                 |        |                   | $    | 2,719 |       |      | $      | 17,365 |        |   | $     | 11,568 |       
|                                         | Gain (loss) on commodity derivatives               |                              |        | (1,128                                | )      |                   |      | 454   |       |      |        | (3,562 | )      |   |       | 1,022  |       
|                                         | Lease bonuses and rentals                          |                              |        | 120                                   |        |                   |      | 162   |       |      |        | 621    |        |   |       | 488    |       
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|                                         |                                                    | Total revenues               |        |                                       | 4,792  |                   |      |       | 3,335 |      |        |        | 14,424 |   |       |        | 13,078 |  
|Costs and expenses:                      |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|                                         | Lease operating                                    |                              |        | 1,834                                 |        |                   |      | 780   |       |      |        | 5,563  |        |   |       | 2,332  |       
|                                         | Exploration and acquisition                        |                              |        | 263                                   |        |                   |      | 497   |       |      |        | 712    |        |   |       | 997    |       
|                                         | Depreciation, depletion and amortization           |                              |        | 1,428                                 |        |                   |      | 662   |       |      |        | 4,601  |        |   |       | 2,278  |       
|                                         | General and administrative                         |                              |        | 1,728                                 |        |                   |      | 633   |       |      |        | 5,397  |        |   |       | 1,960  |       
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|                                         |                                                    | Total costs and expenses     |        |                                       | 5,253  |                   |      |       | 2,572 |      |        |        | 16,273 |   |       |        | 7,567  |  
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|Operating income (loss)                  |                                                    |                              | (461   | )                                     |        |                   | 763  |       |       |      | (1,849 | )      |        |   | 5,511 |       
|Other income (expense)                   |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|                                         | Equity in losses of unconsolidated investments     |                              |        | (10                                   | )      |                   |      | (18   | )     |      |        | (74    | )      |   |       | (173   | )     
|                                         | Gain (loss) on sale of properties and other assets |                              |        | (1,082                                | )      |                   |      | 115   |       |      |        | (2,117 | )      |   |       | 285    |       
|                                         | Loss on sale of marketable securities              |                              |        |                                      |        |                   |      | (15   | )     |      |        | (1     | )      |   |       | (10    | )     
|                                         | Interest and other                                 |                              |        | 217                                   |        |                   |      | 42    |       |      |        | 184    |        |   |       | 143    |       
|                                         | Interest expense                                   |                              |        | (658                                  | )      |                   |      | (276  | )     |      |        | (1,517 | )      |   |       | (975   | )     
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|                                         |                                                    | Total other income (expense) |        |                                       | (1,533 | )                 |      |       | (152  | )    |        |        | (3,525 | ) |       |        | (730   | )
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|Net income (loss) before income taxes    |                                                    |                              | (1,994 | )                                     |        |                   | 611  |       |       |      | (5,374 | )      |        |   | 4,781 |       
|Provision (benefit) for income taxes     |                                                    |                              | (828   | )                                     |        |                   | 226  |       |       |      | (1,861 | )      |        |   | 1,769 |       
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|Net income (loss)                        |                                                    |                              | (1,166 | )                                     |        |                   | 385  |       |       |      | (3,513 | )      |        |   | 3,012 |       
|Less: dividends on preferred shares      |                                                    |                              | 90     |                                       |        |                   | 90   |       |       |      | 270    |        |        |   | 270   |       
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|Income (loss) available to common shares |                                                    | $                            | (1,256 | )                                     |        | $                 | 295  |       |       | $    | (3,783 | )      |        | $ | 2,742 |       
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|Basic income (loss) per share            |                                                    | $                            | (0.13  | )                                     |        | $                 | 0.05 |       |       | $    | (0.40  | )      |        | $ | 0.43  |       
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|Diluted income (loss) per share          |                                                    | $                            | (0.13  | )                                     |        | $                 | 0.04 |       |       | $    | (0.40  | )      |        | $ | 0.40  |       
|                                         |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|Weighted average shares outstanding      |                                                    |                              |        |                                       |        |                   |      |       |       |      |        |        |        |   |       |       
|                                         | Basic                                              |                              |        | 9,338                                 |        |                   |      | 6,374 |       |      |        | 9,345  |        |   |       | 6,320  |       
|                                         | Diluted                                            |                              |        | 9,338                                 |        |                   |      | 6,582 |       |      |        | 9,345  |        |   |       | 7,568  |       

See accompanying notes to the consolidated financial statements

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TOREADOR RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                                  |  |                                                                                   |                                               |                                                     |        |                   |        |      |         |       |         |  
|------------------------------------------------- |  | --------------------------------------------------------------------------------- | --------------------------------------------- | --------------------------------------------------- | ------ | ----------------- | ------ | ---- | ------- | ----- | ------- | -
|                                                  |  |                                                                                   |                                               |                                                     |        | Nine Months Ended
|                                                  |  |                                                                                   |                                               |                                                     |        | September 30     
|                                                  |  |                                                                                   |                                               |                                                     |        |                  
|                                                  |  |                                                                                   |                                               |                                                     |        | 2002              |        | 2001
|                                                  |  |                                                                                   |                                               |                                                     |        |                   |        |     
|                                                  |  |                                                                                   |                                               |                                                     |        | (in thousands)   
|Cash flows from operating activities:             |  |                                                                                   |                                               |                                                     |        |                   |        |     
|                                                  |  | Net income (loss)                                                                 |                                               | $                                                   | (3,513 | )                 |        | $    | 3,012   |      
|                                                  |  | Adjustments to reconcile net income to net cash provided by operating activities: |                                               |                                                     |        |                   |        |      |         |      
|                                                  |  |                                                                                   | Change in fair value of commodity derivatives |                                                     |        | 2,411             |        |      |         | (373  | )      
|                                                  |  |                                                                                   | Depreciation, depletion and amortization      |                                                     |        | 4,601             |        |      |         | 2,278 |        
|                                                  |  |                                                                                   | Loss (gain) on sale of properties             |                                                     |        | 2,117             |        |      |         | (285  | )      
|                                                  |  |                                                                                   | Loss on sale of marketable securities         |                                                     |        | 1                 |        |      |         | 10    |        
|                                                  |  |                                                                                   | Equity in loss of unconsolidated investments  |                                                     |        | 102               |        |      |         | 173   |        
|                                                  |  |                                                                                   | Dry holes and abandonments                    |                                                     |        |                  |        |      |         | 553   |        
|                                                  |  | Decrease (increase) in operating assets:                                          |                                               |                                                     |        |                   |        |      |         |      
|                                                  |  |                                                                                   | Accounts and notes receivable                 |                                                     |        | (379              | )      |      |         | 517   |        
|                                                  |  |                                                                                   | Income taxes receivable                       |                                                     |        | (702              | )      |      |         |      |        
|                                                  |  |                                                                                   | Other current assets                          |                                                     |        | (1,648            | )      |      |         | (788  | )      
|                                                  |  |                                                                                   | Other assets                                  |                                                     |        | 44                |        |      |         | 109   |        
|                                                  |  | Increase (decrease) in operating liabilities:                                     |                                               |                                                     |        |                   |        |      |         |      
|                                                  |  |                                                                                   | Accounts payable and accrued liabilities      |                                                     |        | (568              | )      |      |         | (225  | )      
|                                                  |  |                                                                                   | Income taxes payable                          |                                                     |        | 292               |        |      |         | 928   |        
|                                                  |  |                                                                                   | Deferred taxes                                |                                                     |        | (1,174            | )      |      |         | (32   | )      
|                                                  |  |                                                                                   | Other                                         |                                                     |        | 63                |        |      |         |      |        
|                                                  |  |                                                                                   |                                               |                                                     |        |                   |        |     
|                                                  |  |                                                                                   |                                               | Net cash provided by operating activities           |        |                   | 1,647  |      |         |       | 5,877   |  
|Cash flows from investing activities:             |  |                                                                                   |                                               |                                                     |        |                   |        |     
|                                                  |  | Expenditures for properties and equipment                                         |                                               |                                                     | (2,147 | )                 |        |      | (10,633 | )    
|                                                  |  | Proceeds from the sale of properties and equipment                                |                                               |                                                     | 4,316  |                   |        |      | 638     |      
|                                                  |  | Investment in EnergyNet.com, Inc.                                                 |                                               |                                                     |       |                   |        |      | (100    | )    
|                                                  |  | Purchase of marketable securities                                                 |                                               |                                                     | (51    | )                 |        |      | (643    | )    
|                                                  |  | Proceeds from sale of marketable securities                                       |                                               |                                                     | 215    |                   |        |      | 326     |      
|                                                  |  |                                                                                   |                                               |                                                     |        |                   |        |     
|                                                  |  |                                                                                   |                                               | Net cash provided by (used in) investing activities |        |                   | 2,333  |      |         |       | (10,412 | )
|Cash flows from financing activities:             |  |                                                                                   |                                               |                                                     |        |                   |        |     
|                                                  |  | Payment for debt issuance costs                                                   |                                               |                                                     | (175   | )                 |        |      | (138    | )    
|                                                  |  | Borrowings under revolving credit arrangements                                    |                                               |                                                     | 4,207  |                   |        |      | 9,043   |      
|                                                  |  | Repayments under revolving credit arrangements                                    |                                               |                                                     | (9,039 | )                 |        |      | (5,383  | )    
|                                                  |  | Proceeds from issuance of stock                                                   |                                               |                                                     |       |                   |        |      | 247     |      
|                                                  |  | Payment of preferred dividends                                                    |                                               |                                                     | (270   | )                 |        |      | (270    | )    
|                                                  |  | Purchase of treasury stock                                                        |                                               |                                                     | (180   | )                 |        |      | (468    | )    
|                                                  |  |                                                                                   |                                               |                                                     |        |                   |        |     
|                                                  |  |                                                                                   |                                               | Net cash provided by (used in) financing activities |        |                   | (5,457 | )    |         |       | 3,031   |  
|                                                  |  |                                                                                   |                                               |                                                     |        |                   |        |     
|Net decrease in cash and cash equivalents         |  |                                                                                   | (1,477                                        | )                                                   |        |                   | (1,504 | )   
|Cash and cash equivalents, beginning of period    |  |                                                                                   | 2,155                                         |                                                     |        |                   | 1,756  |     
|                                                  |  |                                                                                   |                                               |                                                     |        |                   |        |     
|Cash and cash equivalents, end of period          |  | $                                                                                 | 678                                           |                                                     |        | $                 | 252    |     
|                                                  |  |                                                                                   |                                               |                                                     |        |                   |        |     
|Supplemental disclosure of cash flow information: |  |                                                                                   |                                               |                                                     |        |                   |        |     
|                                                  |  | Cash paid during the period for income taxes                                      |                                               | $                                                   | 124    |                   |        | $    | 842     |      
|                                                  |  | Cash paid during the period for interest                                          |                                               | $                                                   | 1,473  |                   |        | $    | 821     |      

See accompanying notes to the consolidated financial statements

4



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##### Table of Contents






TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE 1  BASIS OF PRESENTATION

You should read these consolidated financial statements along with the
consolidated financial statements and notes in the 2001 Annual Report on Form
10-K of Toreador Resources Corporation (the Company, we, us, our) filed with
the Securities and Exchange Commission. In our opinion, the information
furnished herein reflects all adjustments, only consisting of normal recurring
adjustments necessary for a fair presentation of the results of these interim
periods. Operating results for the three- and nine-month periods ended
September 30, 2002, may not necessarily be indicative of the results for the
year ending December 31, 2002.

NOTE 2  COMPREHENSIVE INCOME

The following table presents the components of comprehensive income, net of
related tax (amounts in thousands):

|                                                      |  |                    |        |                   |  |      |     |      |  |   |        |   |  |   |       |  
|----------------------------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | --- | ---- |  | - | ------ | - |  | - | ----- | -
|                                                      |  | Three Months Ended |        | Nine Months Ended
|                                                      |  | September 30       |        | September 30     
|                                                      |  |                    |        |                  
|                                                      |  | 2002               |        | 2001              |  | 2002 |     | 2001
|                                                      |  |                    |        |                   |  |      |     |     
|Income (loss) available to
common shares              |  | $                  | (1,256 | )                 |  | $    | 295 |      |  | $ | (3,783 | ) |  | $ | 2,742 |  
|Foreign currency
translation adjustment               |  |                    | 657    |                   |  |      |    |      |  |   | (183   | ) |  |   |      |  
|Change in fair value of
available-for-sale
securities |  |                    | (17    | )                 |  |      | (25 | )    |  |   | (68    | ) |  |   | (98   | )
|                                                      |  |                    |        |                   |  |      |     |      |  |   |        |   |  |   |       |  
|Comprehensive income (loss)                           |  | $                  | (616   | )                 |  | $    | 270 |      |  | $ | (4,034 | ) |  | $ | 2,644 |  
|                                                      |  |                    |        |                   |  |      |     |      |  |   |        |   |  |   |       |  

We now report foreign currency translation adjustments as a component of
comprehensive income due to our operations in France and Turkey beginning
January 1, 2002.

NOTE 3  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets (Statement 142). Under Statement 142, goodwill and
intangible assets with indefinite lives are no longer amortized but are
reviewed annually (or more frequently if there is a change in operating
conditions that would make it prudent to do so) for impairment. Separable
intangible assets that are not deemed to have an indefinite life will continue
to be amortized over their useful lives (although Statement 142 specifies no
maximum life). Prior to our merger with Madison Oil Company (Madison) on
December 31, 2001, we had no goodwill; therefore, when we adopted Statement 142
on January 1, 2002, there was no impact on our financial position. The goodwill
we recorded as the result of the Madison merger will be reviewed for impairment
on a regular basis as required by Statement 142.

On August 15, 2001, the FASB issued Statement No. 143, Accounting for Asset
Retirement Obligations (Statement 143). Statement 143 was initiated in 1994
to account for the costs of nuclear decommissioning. The FASB expanded the
scope to include similar closure or removal-type costs in other industries that
are incurred during the life of an asset. That standard requires entities to
record the fair value of a liability for an asset retirement obligation in the
period in which the liability is incurred. When

5Table of Contents

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

the liability is initially
recorded, the entity capitalizes a cost by increasing the carrying amount of
the related long-lived asset. Over time, the liability is accreted to its
present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. Statement 143 is
effective for fiscal years beginning after June 15, 2002, with earlier
application encouraged. We will adopt this standard on January 1, 2003. Upon
adopting the standard, we estimate that we will increase properties and
equipment and record an abandonment liability that will range between $300,000
and $500,000. We do not anticipate that the impact to our results of operations
will be material.

On January 1, 2002, we adopted FASB Statement No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets (Statement 144). The new rules
significantly change the criteria that would have to be met to classify an
asset as held-for-sale. This distinction is important because assets
held-for-sale are stated at the lower of their fair values or carrying amounts,
and depreciation is no longer recognized. The new rules also supersede the
provisions of Accounting Principles Board Opinion No. 30 (APB 30) with regard
to reporting the effects of a disposal of a segment of a business and require
expected future operating losses from discontinued operations to be displayed
in discontinued operations in the period(s) in which the losses are incurred
(rather than as of the measurement date as presently required by APB 30). In
addition, more dispositions will qualify for discontinued operations treatment
in the income statement. Typically, when we identify properties for sale, we
sell them immediately via Internet auction. When we sell properties via
Internet auction, we set a minimum price (a reserve price) that must be met
for the auction to close. If the reserve price is not met, we have the ability
to remove the property from sale. Because of these facts, the properties
identified for sale do not meet the criteria to be classified as assets
held-for-sale in accordance with Statement 144. Because we had no properties
held for sale at December 31, 2001, adopting Statement 144 did not have a
material impact on our financial position at January 1, 2002, or results of
operations for the three- and nine-month periods ended September 30, 2002.

In April, 2002, the FASB issued Statement No. 145 (Statement 145),
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections, related to accounting for debt
extinguishments, leases and intangible assets of motor carriers. The provisions
of Statement 145 are effective for fiscal years beginning after May 15, 2002,
with earlier adoption encouraged. Because we do not have, and we do not
anticipate having, debt extinguishments or the type of lease transactions
mentioned in Statement 145, we believe that adopting Statement 145 will not
have a material impact on our financial position or results of operations.

6



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##### Table of Contents



TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE 4  ACQUISITIONS

On May 31, 2002, we acquired Wilco Turkey Limited (WTL) from Wilco
Properties, Inc. (WPI). WTLs primary asset is an interest (ranging from
52.5% to 87.5%) in exploration licenses covering 2.2 million acres in the
Thrace Basin and in the central and southeast areas of Turkey. On May 31, 2002,
we also acquired from F-Co Holdings Kandamis (F-CO) additional interests
(ranging from 7.5% to 12.5%) in the same exploration licenses. The purpose of
the acquisition was to obtain, explore and possibly develop the acreage covered
by the licenses. The acreage in the Thrace Basin is adjacent to or near the
acreage we held prior to the acquisition of WTL. In exchange for all of the
outstanding common stock of WTL, we have agreed to give WPI an overriding
royalty interest in any successful wells we drill on the acreage covered by the
exploration licenses we acquired. Additionally, both WPI and F-CO retained net
profits interests in the operation of the Canhidir #1, a carbon dioxide well
that WTL completed prior to the acquisition. The well has proven carbon dioxide
reserves, but has not produced to date due to the lack of a carbon dioxide
market. We have also agreed to give F-CO, in exchange for its interest in the
acreage, an overriding royalty interest in any successful wells we drill on the
acreage. As of the acquisition date, there were no outstanding liabilities
associated with WTL. We did not convey value to WPI or F-CO on the acquisition
date or assume any liabilities; therefore, the fair value of the transaction
was zero. We have allocated no value to the assets acquired from WTL and F-CO.
WPI is controlled by William I. Lee, a director and stockholder, and F-CO is
controlled by Peter L. Falb, a director and stockholder.

NOTE 5  GEOGRAPHIC OPERATING SEGMENT INFORMATION

We have operations in only one industry segment, the oil and gas exploration
and production industry. We have structured the Company along geographic
operating segments or regions. As a result, we have reportable operations in
the United States, France and Turkey. Geographic operating segment income tax
expenses have been determined based on statutory rates existing in the various
tax jurisdictions where we have oil and natural gas producing activities.

The following tables provide the geographic operating segment data required by
Statement of Financial Accounting Standards No. 131, Disclosure about Segments
of an Enterprise and Related Information. Operations in France and Turkey began
when we completed our merger with Madison on December 31, 2001. Accordingly, we
had operations in only the U.S. segment during the three- and nine-month
periods ended September 30, 2001. Subsequent to December 31, 2001, we combined
the United States and Headquarters and Other segments to more accurately
reflect the way we analyze our operations.

7



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##### Table of Contents



TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |               |       |  
|------------------------------------- | ---------------------------------------------- | ---------------------------- | ------ | ------------------------------------- | ------ | ------ | ------ | ------ | ----- | -------- | ----- | ------------- | --- | - | ------ | ------ | ------ | - | ------ | ------------- | ----- | -
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        | Three Months 
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        | Ended        
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        | September 30,
|                                      |                                                |                              |        | Three Months Ended September 30, 2002 |        | 2001  
|                                      |                                                |                              |        |                                       |        |       
|                                      |                                                |                              |        | United States                         |        | France |        | Turkey |       | Total(1) |       | United States
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |              
|                                      |                                                |                              |        | (in thousands)                       
|Revenues:                             |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|                                      | Oil and gas sales                              |                              | $      | 2,670                                 |        |        | $      | 2,382  |       |          | $     | 748           |     |   | $      | 5,800  |        |   | $      | 2,719         |      
|                                      | Gain (loss) on commodity derivatives           |                              |        | (446                                  | )      |        |        | (682   | )     |          |       |              |     |   |        | (1,128 | )      |   |        | 454           |      
|                                      | Lease bonuses and rentals                      |                              |        | 120                                   |        |        |        |       |       |          |       |              |     |   |        | 120    |        |   |        | 162           |      
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|                                      |                                                | Total revenues               |        |                                       | 2,344  |        |        |        | 1,700 |          |       |               | 748 |   |        |        | 4,792  |   |        |               | 3,335 |  
|Costs and expenses:                   |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|                                      | Lease operating                                |                              |        | 601                                   |        |        |        | 997    |       |          |       | 236           |     |   |        | 1,834  |        |   |        | 780           |      
|                                      | Exploration and acquisition                    |                              |        | 263                                   |        |        |        |       |       |          |       |              |     |   |        | 263    |        |   |        | 497           |      
|                                      | Depreciation, depletion
and amortization       |                              |        | 678                                   |        |        |        | 466    |       |          |       | 284           |     |   |        | 1,428  |        |   |        | 662           |      
|                                      | General and administrative                     |                              |        | 1,305                                 |        |        |        | 167    |       |          |       | 256           |     |   |        | 1,728  |        |   |        | 633           |      
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|                                      |                                                | Total costs and expenses     |        |                                       | 2,847  |        |        |        | 1,630 |          |       |               | 776 |   |        |        | 5,253  |   |        |               | 2,572 |  
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|Operating income (loss)               |                                                |                              | (503   | )                                     |        |        | 70     |        |       |          | (28   | )             |     |   | (461   | )      |        |   | 763    |              
|Other income (expense)                |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|                                      | Equity in losses of
unconsolidated investments |                              |        | (10                                   | )      |        |        |       |       |          |       |              |     |   |        | (10    | )      |   |        | (18           | )    
|                                      | Gain (loss) on sale of properties              |                              |        | (1,082                                | )      |        |        |       |       |          |       |              |     |   |        | (1,082 | )      |   |        | 115           |      
|                                      | Loss on sale of marketable securities          |                              |        |                                      |        |        |        |       |       |          |       |              |     |   |        |       |        |   |        | (15           | )    
|                                      | Interest and other                             |                              |        | 31                                    |        |        |        | 180    |       |          |       | 6             |     |   |        | 217    |        |   |        | 42            |      
|                                      | Interest expense                               |                              |        | (475                                  | )      |        |        | (183   | )     |          |       |              |     |   |        | (658   | )      |   |        | (276          | )    
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|                                      |                                                | Total other income (expense) |        |                                       | (1,536 | )      |        |        | (3    | )        |       |               | 6   |   |        |        | (1,533 | ) |        |               | (152  | )
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|Net income (loss) before income taxes |                                                |                              | (2,039 | )                                     |        |        | 67     |        |       |          | (22   | )             |     |   | (1,994 | )      |        |   | 611    |              
|Provision (benefit) for income taxes  |                                                |                              | (828   | )                                     |        |        |       |        |       |          |      |               |     |   | (828   | )      |        |   | 226    |              
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|Net income (loss)                     |                                                | $                            | (1,211 | )                                     |        | $      | 67     |        |       | $        | (22   | )             |     | $ | (1,166 | )      |        | $ | 385    |              
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              
|Total assets                          |                                                | $                            | 91,060 |                                       |        | $      | 24,666 |        |       | $        | 9,424 |               |     | $ | 85,828 |        |        | $ | 47,847 |              
|                                      |                                                |                              |        |                                       |        |        |        |        |       |          |       |               |     |   |        |        |        |   |        |              



---

|(1) |  | Total consolidated assets reflect the effect of intersegment
eliminations.
|--- |  | --------------------------------------------------------------------------

8



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TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |               |        |  
|------------------------------------- | ---------------------------------------------- | ---------------------------- | ------ | ------------------------------------ | ------ | ------ | ------ | ------ | ----- | -------- | ----- | ------------- | ----- | - | ------ | ------ | ------ | - | ------ | ------------- | ------ | -
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        | Nine Months  
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        | Ended        
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        | September 30,
|                                      |                                                |                              |        | Nine Months Ended September 30, 2002 |        | 2001  
|                                      |                                                |                              |        |                                      |        |       
|                                      |                                                |                              |        | United States                        |        | France |        | Turkey |       | Total(1) |       | United States
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |              
|                                      |                                                |                              |        | (in thousands)                      
|Revenues:                             |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              
|                                      | Oil and gas sales                              |                              | $      | 8,642                                |        |        | $      | 6,934  |       |          | $     | 1,789         |       |   | $      | 17,365 |        |   | $      | 11,568        |       
|                                      | Gain (loss) on commodity derivatives           |                              |        | (1,612                               | )      |        |        | (1,950 | )     |          |       |              |       |   |        | (3,562 | )      |   |        | 1,022         |       
|                                      | Lease bonuses and rentals                      |                              |        | 621                                  |        |        |        |       |       |          |       |              |       |   |        | 621    |        |   |        | 488           |       
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              
|                                      |                                                | Total revenues               |        |                                      | 7,651  |        |        |        | 4,984 |          |       |               | 1,789 |   |        |        | 14,424 |   |        |               | 13,078 |  
|Costs and expenses:                   |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              
|                                      | Lease operating                                |                              |        | 1,877                                |        |        |        | 3,008  |       |          |       | 678           |       |   |        | 5,563  |        |   |        | 2,332         |       
|                                      | Exploration and acquisition                    |                              |        | 712                                  |        |        |        |       |       |          |       |              |       |   |        | 712    |        |   |        | 997           |       
|                                      | Depreciation, depletion
and amortization       |                              |        | 2,527                                |        |        |        | 1,359  |       |          |       | 715           |       |   |        | 4,601  |        |   |        | 2,278         |       
|                                      | General and administrative                     |                              |        | 4,393                                |        |        |        | 417    |       |          |       | 587           |       |   |        | 5,397  |        |   |        | 1,960         |       
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              
|                                      |                                                | Total costs and expenses     |        |                                      | 9,509  |        |        |        | 4,784 |          |       |               | 1,980 |   |        |        | 16,273 |   |        |               | 7,567  |  
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              
|Operating income (loss)               |                                                |                              | (1,858 | )                                    |        |        | 200    |        |       |          | (191  | )             |       |   | (1,849 | )      |        |   | 5,511  |              
|Other income (expense)                |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              
|                                      | Equity in losses of
unconsolidated investments |                              |        | (74                                  | )      |        |        |       |       |          |       |              |       |   |        | (74    | )      |   |        | (173          | )     
|                                      | Gain (loss) on sale of properties              |                              |        | (2,117                               | )      |        |        |       |       |          |       |              |       |   |        | (2,117 | )      |   |        | 285           |       
|                                      | Loss on sale of marketable securities          |                              |        | (1                                   | )      |        |        |       |       |          |       |              |       |   |        | (1     | )      |   |        | (10           | )     
|                                      | Interest and other                             |                              |        | 49                                   |        |        |        | 115    |       |          |       | 20            |       |   |        | 184    |        |   |        | 143           |       
|                                      | Interest expense                               |                              |        | (1,030                               | )      |        |        | (487   | )     |          |       |              |       |   |        | (1,517 | )      |   |        | (975          | )     
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              
|                                      |                                                | Total other income (expense) |        |                                      | (3,173 | )      |        |        | (372  | )        |       |               | 20    |   |        |        | (3,525 | ) |        |               | (730   | )
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              
|Net income (loss) before income taxes |                                                |                              | (5,031 | )                                    |        |        | (172   | )      |       |          | (171  | )             |       |   | (5,374 | )      |        |   | 4,781  |              
|Provision (benefit) for income taxes  |                                                |                              | (1,861 | )                                    |        |        |       |        |       |          |      |               |       |   | (1,861 | )      |        |   | 1,769  |              
|Net income (loss)                     |                                                | $                            | (3,170 | )                                    |        | $      | (172   | )      |       | $        | (171  | )             |       | $ | (3,513 | )      |        | $ | 3,012  |              
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              
|Total assets                          |                                                | $                            | 91,060 |                                      |        | $      | 24,666 |        |       | $        | 9,424 |               |       | $ | 85,828 |        |        | $ | 47,847 |              
|                                      |                                                |                              |        |                                      |        |        |        |        |       |          |       |               |       |   |        |        |        |   |        |              



---

|(1) |  | Total consolidated assets reflect the effect of intersegment
eliminations.
|--- |  | --------------------------------------------------------------------------

9



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##### Table of Contents



TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE 6  DERIVATIVE FINANCIAL INSTRUMENTS

We utilize commodity derivative instruments as part of our risk management
program. These transactions are generally structured as either swaps or collar
contracts. A swap can be described as having the effect of an outright sale at
a specific price. A collar has the effect of creating a sale only if a floor or
ceiling price is exceeded. These instruments (i) reduce the effect of the price
fluctuations of the commodities we produce and sell; (ii) support our annual
capital budgeting and expenditure plans; (iii) protect the amounts required for
servicing outstanding debt; and (iv) maximize the funds available under our
existing credit facilities. The trading party that represents the other side of
each of these transactions is known as a counterparty. The counterparty of
our transactions is Coral Energy Holdings, L.P., an affiliate of Royal
Dutch/Shell.

The following table lists our open natural gas derivative contracts as of
September 30, 2002. All contracts are based on NYMEX pricing. We estimated the
fair value of the option agreement at September 30, 2002, from quotes by the
counterparty representing the amounts we would expect to receive or pay to
terminate the agreements on that date. We estimated the fair value of the swap
agreement based on the difference between the strike prices and the forward
NYMEX prices for each determination period multiplied by the notional volume
for each period.

|         |  |           |      |             |  |            |      |            |  |              |        |               |  |  |         |  |  |             |       |              |  |   |          |  
|-------- |  | --------- | ---- | ----------- |  | ---------- | ---- | ---------- |  | ------------ | ------ | ------------- |  |  | ------- |  |  | ----------- | ----- | ------------ |  | - | -------- | -
|         |  |           |      |             |  |            |      |            |  | Notional     |        |               |  |  |         |  |  |             |       | Fair Value 
|         |  |           |      |             |  |            |      |            |  | Volume per   |        | Aggregate     |  |  |         |  |  | Gain/(Loss)
|Contract |  | Effective |      | Termination |  | Month      |      | Volume     |  | Strike Price |        | September 30,
|Type     |  | Date      |      | Date        |  | (MMBtu)(1) |      | (MMBtu)(1) |  | per MMBtu    |        | 2002         
|         |  |           |      |             |  |            |      |            |  |              |        |              
|         |  | November  |      | December    |  |            |      |            |  |              |        |               |  |  |         |  |  |             |       |             
|Swap     |  |           | 2002 |             |  |            | 2002 |            |  |              | 80,000 |               |  |  | 160,000 |  |  | $           | 3.059 |              |  | $ | (187,380 | )
|         |  | January   |      | December    |  |            |      |            |  |              |        |               |  |  |         |  |  |             |       |             
|         |  |           | 2003 |             |  |            | 2003 |            |  |              | 30,000 |               |  |  | 360,000 |  |  | $           | 3.900 |              |  | $ | (58,710  | )
|         |  | January   |      | December    |  |            |      |            |  |              |        |               |  |  |         |  |  |             |       |             
|         |  |           | 2004 |             |  |            | 2004 |            |  |              | 50,000 |               |  |  | 600,000 |  |  | $           | 3.920 |              |  | $ | 23,150   |  
|Put      |  | January   |      | December    |  |            |      |            |  |              |        |               |  |  |         |  |  |             |       |             
|Option   |  |           | 2003 |             |  |            | 2003 |            |  |              | 80,000 |               |  |  | 960,000 |  |  | $           | 3.250 |              |  | $ | 180,668  |  
|         |  | January   |      | December    |  |            |      |            |  |              |        |               |  |  |         |  |  |             |       |             
|         |  |           | 2004 |             |  |            | 2004 |            |  |              | 50,000 |               |  |  | 600,000 |  |  | $           | 3.250 |              |  | $ | 176,764  |  
|Call     |  | January   |      | December    |  |            |      |            |  |              |        |               |  |  |         |  |  |             |       |             
|Option   |  |           | 2003 |             |  |            | 2003 |            |  |              | 80,000 |               |  |  | 960,000 |  |  | $           | 4.850 |              |  | $ | (295,479 | )
|         |  | January   |      | December    |  |            |      |            |  |              |        |               |  |  |         |  |  |             |       |             
|         |  |           | 2004 |             |  |            | 2004 |            |  |              | 50,000 |               |  |  | 600,000 |  |  | $           | 5.275 |              |  | $ | (152,975 | )



---

|(1) |  | MMBtu  Million British thermal units.
|--- |  | --------------------------------------

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##### Table of Contents



TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The following table lists our open crude oil derivative contracts as of
September 30, 2002. We estimated the fair value of the swap agreements based on
the difference between the strike prices and the forward index prices for each
determination period multiplied by the notional volume for each period.

|            |  |           |      |             |  |        |      |        |  |              |        |           |  |              |         |  |  |                |  |              |          |   |  | 
|----------- |  | --------- | ---- | ----------- |  | ------ | ---- | ------ |  | ------------ | ------ | --------- |  | ------------ | ------- |  |  | -------------- |  | ------------ | -------- | - |  | 
|            |  |           |      |             |  |        |      |        |  | Notional     |        |           |  |              |         |  |  |                |  | Fair Value 
|            |  |           |      |             |  |        |      |        |  | Volume per   |        | Aggregate |  |              |         |  |  | Gain/(Loss)   
|Contract    |  | Effective |      | Termination |  | Month  |      | Volume |  | Strike Price |        | September
|Type        |  | Date      |      | Date        |  | (Bbls) |      | (Bbls) |  | per Bbl      |        | 30, 2002 
|            |  |           |      |             |  |        |      |        |  |              |        |          
|WTI
Crude   |  | October   |      | December    |  |        |      |        |  |              |        |           |  |              |         |  |  |                |  |             
|Swap        |  |           | 2002 |             |  |        | 2002 |        |  |              | 15,000 |           |  |              | 45,000  |  |  | $22.480        |  | $            | (338,100 | )
|Brent
Crude |  | October   |      | December    |  |        |      |        |  |              |        |           |  |              |         |  |  |                |  |             
|Swap        |  |           | 2002 |             |  |        | 2002 |        |  |              | 37,500 |           |  |              | 112,500 |  |  | $23.108        |  | $            | (641,475 | )
|Brent
Crude |  | January   |      | December    |  |        |      |        |  |              |        |           |  | $21.00 Floor |         |  |  |               
|Collar      |  |           | 2003 |             |  |        | 2003 |        |  |              | 20,000 |           |  |              | 240,000 |  |  | $26.00 Ceiling |  | $            | (124,800 | )

NOTE 7  LONG-TERM DEBT

On May 9, 2002, we amended our revolving credit facility with Bank of Texas
(the Texas Facility). The amendment divided the amounts outstanding into two
tranches. Tranche A amounted to $18,024,750, and Tranche B represented all
amounts outstanding in excess of Tranche A. The amendment required that all
amounts outstanding under Tranche B be repaid by July 15, 2002, and called for
a monthly penalty of $50,000 if such amounts were not repaid by July 15, 2002.
In connection with this amendment, we paid a fee of $100,000. On August 1,
2002, we amended the Texas Facility again. Under the terms of this amendment,
Tranche A was increased to $20,000,000, and the due date for Tranche B was
extended to November 1, 2002. Additionally, this amendment required no monthly
penalty if all amounts under Tranche B were not repaid by November 1, 2002. In
connection with this amendment, we paid a fee of $75,000. On September 23,
2002, we amended the Texas Facility for the fourth time. The fourth amendment
eliminated the Tranches, set the borrowing base at $19,375,000 and calls for
monthly principal payments of $150,000 through March 2003. There was no fee
associated with this amendment. At September 30, 2002, there was $19,316,500
outstanding under the Texas Facility, and, in accordance with the amendment, we
have included $900,000 under the current portion of long-term debt on the
balance sheet.

NOTE 8  LITIGATION

On September 18, 2002, we received a ruling from the American Arbitration
Association related to the Trinidad Arbitration legal proceeding described in
the Notes to Consolidated Financial Statements included in our December 31,
2001, Annual Report on Form 10-K. The arbitrator ruled that certain payments by
Toreadors subsidiary were delinquent, and, according to the terms of the
partnership agreement, Toreadors interest in Trinidad Exploration and
Development, Ltd. (TED) has been reduced from 25% to 16.33%.

On August 7, 2002, we reached an agreement related to the Karak Petroleum legal
proceeding described in the Notes to Consolidated Financial Statements included
in our December 31, 2001, Annual Report on

11Table of Contents

TOREADOR RESOURCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Form 10-K. Under the terms of the agreement, we will pay the plaintiffs
$400,000 for full release of liability. Written documentation reflecting the
foregoing was finalized on August 29, 2002. Prior to the agreement, we had no
amounts accrued for this proceeding, which we assumed in the Madison merger.
Because we had no amounts accrued for this contingency, and it existed prior to
the date of the merger, we have adjusted our purchase price allocation by
adding $400,000 to both goodwill and accounts payable and accrued liabilities.
The agreement requires that we remit the $400,000 in two installments. The
first installment of $50,000 was paid on August 29, 2002, and the remaining
$350,000 must be paid by February 3, 2003.

NOTE 9  EARNINGS PER COMMON SHARE

The following table reconciles the numerators and denominators of the basic and
diluted earnings per ordinary share computation.

|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |   |       |      | 
|-------------------------- | ------------ | ---------------------------------------- | -------------------------- | - | ------------------------------------- | ----- | ----------------- | - | ----- | ---- | ----- | - | ------ | ----- | ----- | - | ----- | ---- | 
|                           |              |                                          |                            |   | Three Months Ended                    |       | Nine Months Ended
|                           |              |                                          |                            |   | September 30                          |       | September 30     
|                           |              |                                          |                            |   |                                       |       |                  
|                           |              |                                          |                            |   | 2002                                  |       | 2001              |   | 2002  |      | 2001 
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |      
|                           |              |                                          |                            |   | (in thousands, except per share data)
|Basic earnings per share   |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|                           | Numerator:   |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |   |      
|                           |              | Net income (loss)                        |                            | $ | (1,166                                | )     |                   | $ | 385   |      |       | $ | (3,513 | )     |       | $ | 3,012 |     
|                           |              | Less: dividends on preferred shares      |                            |   | 90                                    |       |                   |   | 90    |      |       |   | 270    |       |       |   | 270   |     
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|                           |              | Income (loss) available to common shares |                            | $ | (1,256                                | )     |                   | $ | 295   |      |       | $ | (3,783 | )     |       | $ | 2,742 |     
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|                           | Denominator: |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |   |      
|                           |              | Common shares outstanding                |                            |   | 9,338                                 |       |                   |   | 6,374 |      |       |   | 9,345  |       |       |   | 6,320 |     
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|                           |              |                                          | Basic earnings per share   |   | $                                     | (0.13 | )                 |   | $     | 0.05 |       |   | $      | (0.40 | )     |   | $     | 0.43 | 
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|Diluted earnings per share |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|                           | Numerator:   |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |   |      
|                           |              | Net income (loss)                        |                            | $ | (1,166                                | )     |                   | $ | 385   |      |       | $ | (3,513 | )     |       | $ | 3,012 |     
|                           |              | Less: dividends on preferred shares      |                            |   | 90                                    |       |                   |   | 90    |      |       |   | 270    |       |       |   | N/A   | (1) 
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|                           |              | Income (loss) available to common shares |                            | $ | (1,256                                | )     |                   | $ | 295   |      |       | $ | (3,783 | )     |       | $ | 3,012 |     
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|                           | Denominator: |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |   |      
|                           |              | Common shares outstanding                |                            |   | 9,338                                 |       |                   |   | 6,374 |      |       |   | 9,345  |       |       |   | 6,320 |     
|                           |              | Common stock options and warrants        |                            |   | N/A                                   | (2)   |                   |   | 208   |      |       |   | N/A    | (2)   |       |   | 248   |     
|                           |              | Conversion of preferred shares           |                            |   | N/A                                   | (2)   |                   |   | N/A   | (3)  |       |   | N/A    | (2)   |       |   | 1,000 |     
|                           |              | Conversion of debenture                  |                            |   | N/A                                   | (2)   |                   |   |      |      |       |   | N/A    | (2)   |       |   |      |     
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|                           |              |                                          | 9,338                      |   |                                       |       | 6,582             |   |       |      | 9,345 |   |        |       | 7,568 |  
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  
|                           |              |                                          | Diluted earnings per share |   | $                                     | (0.13 | )                 |   | $     | 0.04 |       |   | $      | (0.40 | )     |   | $     | 0.40 | 
|                           |              |                                          |                            |   |                                       |       |                   |   |       |      |       |   |        |       |       |  



---

|(1) |  | Because we have assumed that the preferred shares were
converted into common shares, there would have been no
preferred dividends paid.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Due to the net loss for the three- and nine-month periods
ended September 30, 2002, there were no dilutive shares.                     
|   
|(3) |  | Preferred shares were antidilutive for the three months
ended September 30, 2001.                                                      

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##### Table of Contents






|         |                                                                                      
|-------- | -------------------------------------------------------------------------------------
|ITEM 2  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed under Managements Discussion and Analysis of
Financial Condition and Results of Operations and elsewhere in this report may
constitute forward-looking statements for purposes of the Securities Act of
1933, and the Securities Exchange Act of 1934 and, as such, may involve known
and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. When used in this report, the words anticipates,
estimates, plans, believes, continues, expects, projections,
forecasts, intends, may, might, could, should, and similar
expressions are intended to be among the statements that identify
forward-looking statements. Various factors that could cause the actual
results, performance or achievements to differ materially from our expectations
are disclosed in this report (Cautionary Statements), including, without
limitation, those statements made in conjunction with the forward-looking
statements included under the caption identified above and otherwise herein.
All written and oral forward-looking statements attributable to us are
expressly qualified in their entirety by the Cautionary Statements.

LIQUIDITY AND CAPITAL RESOURCES

This section should be read in conjunction with Note 7 in the Notes to
Consolidated Financial Statements included in this filing.

For the first nine months of 2002, cash flow from operations before working
capital changes and including proceeds from the sale of properties and
equipment was $10.0 million, compared with $6.0 million for the year-ago
period. Cash flow from operations before working capital changes for the first
nine months of 2002 was $5.7 million versus $5.4 million for the same period in
2001. We continually review the operating results of each of our properties.
When we discover under performing properties, we attempt to liquidate them.
During the nine months ended September 30, 2002, we received $4.3 million in
proceeds from sales of property and equipment. We expect that cash flow
provided by operating activities for the remaining three months of 2002 will be
approximately $2.6 million.

We currently have two senior borrowing facilities. First, we have a revolving
credit facility with Bank of Texas (the Texas Facility), which had permitted
borrowings of $19.4 million at September 30, 2002. At September 30, 2002, we
had borrowings outstanding under the Texas Facility of approximately $19.3
million. We will be required to make monthly principal payments of $150,000
under the Texas Facility through March 31, 2003, and accordingly, we have
included $900,000 in the current portion of long-term debt on the balance
sheet. On September 23, 2002, we entered into an amendment agreement with Bank
of Texas that established the amounts of the permitted borrowings and the
portion that we are required to pay by March 31, 2003.

We also have a revolving credit facility with Barclays Bank, Plc (the Barclays
Facility). Under the Barclays Facility, we had $15.4 million outstanding at
September 30, 2002. Barclays previously advised us that it intended to withdraw
from the reserve-based lending business and to transfer the balance of its
reserve-based loans to one or more third-party banking institutions Until a
third-party lender assumes the facility, we will not be allowed to borrow any
additional funds under the Barclays Facility. In the interim, we are required
to make monthly principal payments of $300,000 until March 2003, and
accordingly, we have included $1.8 million in the current portion of long-term
debt on the balance sheet. During the first nine months of 2002, we used $4.8
million of our available cash flow to reduce the amounts outstanding under the
Barclays Facility.

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##### Table of Contents



During October 2002, we received approval from our Board of Directors and
holders of a majority of our Series A Convertible Preferred Stock for the
private placement of up to $4 million of additional preferred stock. The new
series of preferred stock, Series A-1 Convertible Preferred Stock, is priced at
$25.00 per share and has essentially the same terms as the Series A Convertible
Preferred Stock. Each share of Series A-1 Convertible Preferred Stock is
entitled to an annual 9% cash dividend payable quarterly and is convertible
into 6.25 shares of our common stock. To date, we have sold 37,000 shares of
Series A-1 Convertible Preferred Stock for aggregate proceeds of $925,000 and
we anticipate continuing to accept subscriptions until December 31, 2002 for up
to an aggregate of $4.0 million of Series A-1 Convertible Preferred Stock. We
expect to use the net proceeds from the private placement to fund portions of
our exploration and development program and for other general corporate
purposes. We are offering this new series of preferred stock only to accredited
investors in accordance with a private placement memorandum. The shares of
Series A-1 Convertible Preferred Stock have not been registered under the
Securities Act of 1933, as amended, and may not be offered or sold in the
United States absent registration or an applicable exemption from registration
requirements.

We anticipate that our 2002 capital expenditures budget, excluding any
acquisitions we may make, will be approximately $5.0 million. The actual amount
will be determined by required exploratory and development drilling. We intend
to fund our capital expenditures budget from operating cash flow, property
sales, the proceeds of any financing we are able to secure, or a combination
thereof. We will continue to focus most of our 2002 capital budget on prospects
in our inventory as a result of the Madison merger. During 2002, we will
continue to limit our activity in France to development drilling on our
existing properties. In Trinidad we are participating in one exploratory well,
and we expect to participate in another prior to year-end on the Southwest
Cedros Peninsula. In Turkey, exploration work will continue on several
projects, including the processing and interpretation of seismic data recently
acquired in the Black Sea.

Dividends on our common stock may be declared and paid out of funds legally
available when and as determined by our Board of Directors. Our policy is to
hold and invest corporate funds in our ongoing operations, and, thus, we do not
anticipate paying cash dividends on our common stock in the foreseeable future.
In addition, under the terms of the Texas Facility, we are prohibited from
paying dividends on the common stock without prior consent from Bank of Texas
(other than dividends payable in shares of common stock). In addition, any
declaration of dividends on our common stock must be approved by a majority of
the holders of our Series A Convertible Preferred Stock and Series A-1
Convertible Preferred Stock.

Dividends on our Series A Convertible Preferred Stock are paid quarterly. Cash
dividends totaling $90,000 and $270,000 were paid for the three- and nine-month
periods ended September 30, 2002 and 2001, respectively. Future dividends will
be paid in cash at a rate of $90,000 per calendar quarter. Assuming that we
receive subscriptions for the full 160,000 shares of the Series A-1 Convertible
Preferred Stock, we will pay total dividends of $180,000 per calendar quarter.

We believe that sufficient funds will be available from operating cash flow to
meet anticipated capital requirements for fiscal 2002. The following table sets
forth our contractual obligations at September 30, 2002 for the periods shown
(dollars in thousands):

|       |       |   |        |        |        |   |             |       |             |   |               |     |  |   |        |        |  |   |   |   | 
|------ | ----- | - | ------ | ------ | ------ | - | ----------- | ----- | ----------- | - | ------------- | --- |  | - | ------ | ------ |  | - | - | - | 
|       |       |   |        |        |        |   |             |       |             |   | Due Within    |     |  |   |       
|       |       |   |        |        |        |   |             |       |             |   |               |     |  |   |       
|       |       |   | Total  |        | 1 Year |   | 2  3 Years |       | 4  5 Years |   | After 5 Years
|       |       |   |        |        |        |   |             |       |             |   |              
|Debt   |       | $ | 34,667 |        |        | $ | 2,700       |       |             | $ |              |     |  | $ | 31,967 |        |  | $ |  |  
|Leases |       |   | 1,982  |        |        |   | 412         |       |             |   | 814           |     |  |   | 756    |        |  |   |  |  
|       |       |   |        |        |        |   |             |       |             |   |               |     |  |   |        |        |  |   |   |  
|       | Total |   | $      | 36,649 |        |   | $           | 3,112 |             |   | $             | 814 |  |   | $      | 32,723 |  |   | $ |  | 
|       |       |   |        |        |        |   |             |       |             |   |               |     |  |   |        |        |  |   |   |  

14



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##### Table of Contents



CRITICAL ACCOUNTING POLICIES

Other than the adoption of Statement 144 discussed in Note 3 in the Notes to
Consolidated Financial Statements included in this filing, we did not have any
changes in our critical accounting policies or in our significant accounting
estimates during the nine months ended September 30, 2002. Please see our
Annual Report on Form 10-K for the year ended December 31, 2001, for a detailed
discussion of our critical accounting policies.

RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

The following tables present production and average unit prices and costs for
the geographic segments indicated:

|              |              |               |       |  |                    |       |      |  |       |       | 
|------------- | ------------ | ------------- | ----- |  | ------------------ | ----- | ---- |  | ----- | ----- | 
|              |              |               |       |  | Three Months Ended
|              |              |               |       |  | September 30      
|              |              |               |       |  |                   
|              |              |               |       |  | 2002               |       | 2001
|              |              |               |       |  |                    |       |     
|Production    |              |               |       |  |                    |       |      | 
|              | Oil (MBbls): |               |       |  |                    |       |      |  |      
|              |              | United States |       |  | 56                 |       |      |  | 71    |      
|              |              | France        |       |  | 100                |       |      |  |      |      
|              |              | Turkey        |       |  | 30                 |       |      |  |      |      
|              |              |               |       |  |                    |       |      | 
|              |              |               | Total |  |                    | 186   |      |  |       | 71    | 
|              | Gas (MMcf):  |               |       |  |                    |       |      |  |      
|              |              | United States |       |  | 472                |       |      |  | 392   |      
|              |              | France        |       |  |                   |       |      |  |      |      
|              |              | Turkey        |       |  |                   |       |      |  |      |      
|              |              |               |       |  |                    |       |      | 
|              |              |               | Total |  |                    | 472   |      |  |       | 392   | 
|              | MBOE:        |               |       |  |                    |       |      |  |      
|              |              | United States |       |  | 135                |       |      |  | 136   |      
|              |              | France        |       |  | 100                |       |      |  |      |      
|              |              | Turkey        |       |  | 30                 |       |      |  |      |      
|              |              |               |       |  |                    |       |      | 
|              |              |               | Total |  |                    | 265   |      |  |       | 136   | 
|              |              |               |       |  |                    |       |      |  |       |       | 
|Average Price |              |               |       |  |                    |       |      | 
|              | Oil ($/Bbl): |               |       |  |                    |       |      |  |      
|              |              | United States |       |  | 24.12              |       |      |  | 23.33 |      
|              |              | France        |       |  | 23.75              |       |      |  |      |      
|              |              | Turkey        |       |  | 24.87              |       |      |  |      |      
|              |              |               |       |  |                    |       |      | 
|              |              |               | Total |  |                    | 24.04 |      |  |       | 23.33 | 
|              | Gas ($/Mcf): |               |       |  |                    |       |      |  |      
|              |              | United States |       |  | 2.66               |       |      |  | 2.61  |      
|              |              | France        |       |  |                   |       |      |  |      |      
|              |              | Turkey        |       |  |                   |       |      |  |      |      
|              |              |               |       |  |                    |       |      | 
|              |              |               | Total |  |                    | 2.66  |      |  |       | 2.61  | 
|              | $/BOE:       |               |       |  |                    |       |      |  |      
|              |              | United States |       |  | 19.34              |       |      |  | 19.64 |      
|              |              | France        |       |  | 23.75              |       |      |  |      |      
|              |              | Turkey        |       |  | 24.87              |       |      |  |      |      
|              |              |               |       |  |                    |       |      | 
|              |              |               | Total |  |                    | 21.64 |      |  |       | 19.64 | 

REVENUES

Oil and gas sales.Oil and gas sales increased by $3.1 million, or 113%, due to
the operations of properties acquired in the Madison merger. Revenues
attributable to the operations of the properties acquired in the Madison merger
were approximately $3.1 million.

Gain (loss) on commodity derivatives.We utilize commodity derivative
instruments as part of our risk management program. These transactions are
generally structured as either swaps or collar contracts. A swap can be
described as having the effect of an outright sale at a specific price. A
collar has the effect of creating a sale only if a floor or ceiling price is
exceeded. These instruments (i) reduce the effect of the price fluctuations of
the commodities we produce and sell; (ii) support our annual capital budgeting
and expenditure plans; (iii) protect the amounts required for servicing
outstanding debt; and (iv) maximize the

15



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##### Table of Contents



funds available under our existing
credit facilities. The trading party that represents the other side of each of
these transactions is known as a counterparty. The counterparty of our
transactions is Coral Energy Holdings, L.P., an affiliate of Royal Dutch/Shell.
During the third quarter of 2002, we had an unrealized loss of approximately
$304,000 related to our hedging activity, coupled with realized losses of
approximately $824,000. During the third quarter of 2001, we had an unrealized
loss of $98,000 and a realized gain of $552,000. As noted above, we have
structured our commodity derivatives to reduce the effect of price fluctuations
of the commodities we produce and sell. As a result, those derivatives decline
in value as the underlying commodity prices rise. Any losses incurred on
derivatives are offset by higher oil and gas sales revenues due to increases in
underlying commodity prices. See Note 6 in the Notes to Consolidated Financial
Statements included in this filing for more details.

Lease bonuses and rentals.Lease bonuses and rentals decreased $42,000, or 26%,
due to a decrease in leasing activity since the second quarter of 2002 on the
minerals we own in Mississippi.

EXPENSES

Lease operating.Lease operating expenses increased $1.1 million, or 135%, due
to the operations of the properties we acquired in the Madison merger and are
commensurate with the increase in operating revenue from the Madison
properties. Higher lease operating expenses were offset by decreases in U.S.
production taxes, a result of the decline in oil and gas sales prices discussed
above. For the quarter, operating expenses associated with the properties
acquired in the Madison merger amounted to $1.2 million.

Exploration and acquisition.Exploration and acquisition expense decreased
$234,000, or 47%, due to decreased drilling activity compared with the same
period in 2001.

Depletion, depreciation and amortization. DD&A increased $766,000, or 116%,
primarily due to the depletion of the properties we acquired in the Madison
merger. Depletion expense on the properties we acquired in the Madison merger
was approximately $750,000.

General and administrative. General and administrative expenses increased $1.1
million, or 173%, during the third quarter. The majority of this increase was a
result of the Madison merger; however, a significant portion of these expenses,
approximately $318,000, is non-recurring items that are either transaction and
transition costs or other expenses of a one-time nature. General and
administrative expense of approximately $423,000 is directly attributable to
the operation of our new French and Turkish properties. The balance represents
the ongoing expense of the exploration staff that joined the Company as a
result of the Madison merger; these individuals are engaged in U.S. and
international work.

OTHER INCOME AND EXPENSE

Other income and expense resulted in a net charge to expenses of $1.5 million
during the third quarter of 2002 versus $152,000 during the third quarter of
2001. Net expense increased $1.4 million, or 909%, primarily due to losses on
property sales. We lost $1.1 million on property sales closed in the third
quarter of 2002, compared with a property-sale gain of $115,000 in the third
quarter of 2001. As a result of lower oil and gas prices, we elected to proceed
with the sale of several non-economic, non-strategic properties rather than
sustain continued operating losses on those properties. This is in keeping with
our ongoing practice of systematically high-grading our base property holdings.
The remainder of the increase consists of interest on the Barclays Facility and
the convertible debenture; no interest on these facilities was paid in the
year-ago quarter because we were not utilizing these financial facilities.

16



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##### Table of Contents



NET INCOME (LOSS) AVAILABLE TO COMMON SHARES

In the third quarter of 2002, we incurred a net loss of $1.3 million, compared
with net income of $295,000 for the same period in 2001. Lower third-quarter
2002 results were due to losses on commodity derivatives, one-time transaction
and transition costs related to the Madison merger, higher operating costs of
the newly combined company after the addition of the Madison exploration staff,
and losses on the sales of selected properties.

OTHER COMPREHENSIVE INCOME

This item should be read in conjunction with Note 2 in the Notes to
Consolidated Financial Statements included in this filing.

The most significant element of comprehensive income, other than net income
(loss), is foreign currency translation. The function currency of our
operations in France is the Euro, and in Turkey the functional currency is the
Turkish Lira. The exchange rates used to translate the financial position of
those operations at September 30, 2002, were approximately US$ 0.99 per Euro
and US$ 0.61 per million Turkish Lira. The Euro rate at June 30, 2002, was US$
0.99 per Euro and US$ 0.64 per million Turkish Lira. These fluctuations caused
an unrealized gain of $657,000 for the third quarter of 2002. No such charges
existed during the third quarter of 2001 because we had no foreign operations
during that period.

COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

The following tables present production and average unit prices and costs for
the geographic segments indicated:

|              |              |               |       |  |                   |       |      |  |       |       | 
|------------- | ------------ | ------------- | ----- |  | ----------------- | ----- | ---- |  | ----- | ----- | 
|              |              |               |       |  | Nine Months Ended
|              |              |               |       |  | September 30     
|              |              |               |       |  |                  
|              |              |               |       |  | 2002              |       | 2001
|              |              |               |       |  |                   |       |     
|Production    |              |               |       |  |                   |       |      | 
|              | Oil (MBbls): |               |       |  |                   |       |      |  |      
|              |              | United States |       |  | 191               |       |      |  | 223   |      
|              |              | France        |       |  | 316               |       |      |  |      |      
|              |              | Turkey        |       |  | 82                |       |      |  |      |      
|              |              |               |       |  |                   |       |      | 
|              |              |               | Total |  |                   | 589   |      |  |       | 223   | 
|              | Gas (MMcf):  |               |       |  |                   |       |      |  |      
|              |              | United States |       |  | 1,437             |       |      |  | 1,238 |      
|              |              | France        |       |  |                  |       |      |  |      |      
|              |              | Turkey        |       |  |                  |       |      |  |      |      
|              |              |               |       |  |                   |       |      | 
|              |              |               | Total |  |                   | 1,437 |      |  |       | 1,238 | 
|              | MBOE:        |               |       |  |                   |       |      |  |      
|              |              | United States |       |  | 430               |       |      |  | 429   |      
|              |              | France        |       |  | 316               |       |      |  |      |      
|              |              | Turkey        |       |  | 82                |       |      |  |      |      
|              |              |               |       |  |                   |       |      | 
|              |              |               | Total |  |                   | 828   |      |  |       | 429   | 
|             
|Average Price |              |               |       |  |                   |       |      | 
|              | Oil ($/Bbl): |               |       |  |                   |       |      |  |      
|              |              | United States |       |  | 21.79             |       |      |  | 25.13 |      
|              |              | France        |       |  | 21.98             |       |      |  |      |      
|              |              | Turkey        |       |  | 21.74             |       |      |  |      |      
|              |              |               |       |  |                   |       |      | 
|              |              |               | Total |  |                   | 21.88 |      |  |       | 25.13 | 
|              | Gas ($/Mcf): |               |       |  |                   |       |      |  |      
|              |              | United States |       |  | 2.89              |       |      |  | 4.56  |      
|              |              | France        |       |  |                  |       |      |  |      |      
|              |              | Turkey        |       |  |                  |       |      |  |      |      
|              |              |               |       |  |                   |       |      | 
|              |              |               | Total |  |                   | 2.89  |      |  |       | 4.56  | 
|              | $/BOE:       |               |       |  |                   |       |      |  |      
|              |              | United States |       |  | 19.31             |       |      |  | 26.19 |      
|              |              | France        |       |  | 21.98             |       |      |  |      |      
|              |              | Turkey        |       |  | 21.74             |       |      |  |      |      
|              |              |               |       |  |                   |       |      | 
|              |              |               | Total |  |                   | 20.57 |      |  |       | 26.19 | 

17



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##### Table of Contents



REVENUES

Oil and gas sales.Oil and gas sales increased $5.8 million, or 50%, due to the
operations of properties acquired in the Madison merger, but the increase was
offset by decreases in the average realized prices received for domestic
production. Revenues attributable to the operations of the properties acquired
in the Madison merger were approximately $8.7 million. The average realized
price per BOE we received for our U.S. production decreased $5.62, or 21%.

Gain (loss) on commodity derivatives.We utilize commodity derivative
instruments as part of our risk management program. These transactions are
generally structured as either swaps or collar contracts. A swap can be
described as having the effect of an outright sale at a specific price. A
collar has the effect of creating a sale only if a floor or ceiling price is
exceeded. These instruments (i) reduce the effect of the price fluctuations of
the commodities we produce and sell; (ii) support our annual capital budgeting
and expenditure plans; (iii) protect the amounts required for servicing
outstanding debt; and (iv) maximize the funds available under our existing
credit facilities. The trading party that represents the other side of each of
these transactions is known as a counterparty. The counterparty of our
transactions is Coral Energy Holdings, L.P., an affiliate of Royal Dutch/Shell.
During the first nine months of 2002, we had an unrealized loss related to our
hedging activity of approximately $2.4 million and a realized loss of $1.2
million. During the first nine months of 2001, we had an unrealized gain of
$329,000 and a realized gain of $693,000. The losses during the first nine
months of 2002 are due to an increase in oil and gas prices between December
31, 2001, and September 30, 2002. As noted above, we have structured our
commodity derivatives to reduce the effect of price fluctuations of the
commodities we produce and sell. As a result, those derivatives decline in
value as the underlying commodity prices rise. Any losses incurred on
derivatives are offset by higher oil and gas sales revenues due to increases in
underlying commodity prices. See Note 6 in the Notes to Consolidated Financial
Statements included in this filing for more details.

Lease bonuses and rentals.Lease bonuses and rentals increased $133,000, or
27%, due to increases in leasing activity during the last quarter of 2001 and
the first half of 2002, which was a result of several wildcat discoveries in
and around the minerals we own in Mississippi.

EXPENSES

Lease operating.Lease operating expenses increased $3.2 million, or 139%, due
to the operations of the properties we acquired in the Madison merger and are
commensurate with the increase in operating revenue from the Madison
properties. Higher lease operating expenses were offset by decreases in U.S.
production taxes, which were a result of the decline in oil and gas sales
prices discussed above. For the first nine months of 2002, operating expenses
associated with the properties in the Madison merger amounted to $3.7 million.

Exploration and acquisition.Exploration and acquisition expense decreased
$285,000, or 29%, due to a slow down in drilling activity, compared with the
same period in 2001.

Depletion, depreciation and amortization. DD&A increased $2.3 million, or 102%,
due to the depletion of the properties we acquired in the Madison merger. Also
contributing to the increase was a higher depletion on U.S. properties, which
was the result of nine months depletion on the Razorhawk and Anderson et al
acquisitions we closed during the second and third quarters of 2001. Depletion
expense on the properties we acquired from Madison was approximately $2.1
million.

18



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General and administrative. General and administrative expenses increased $3.4
million, or 175%. The majority of this increase was the result of the
acquisition of Madison; however, a significant portion of these expenses,
approximately $818,000, is nonrecurring items that are either transaction and
transition costs or other expenses of a one-time nature. General and
administrative expense of approximately $1.0 million is directly attributable
to the operation of our new French and Turkish properties. The balance
represents the ongoing expense of the exploration staff that joined the Company
as a result of the Madison merger; these individuals are engaged in U.S. and
international work.

OTHER INCOME AND EXPENSE

Other income and expense resulted in a net charge to expenses of $3.5 million
in the first nine months of 2002 versus $730,000 for the same period in 2001.
Net expense increased $2.8 million, or 383%, primarily due to losses on
property sales and increased interest expense. We incurred a $2.1 million loss
on property sales closed in the first nine months of 2002, compared with a
property-sale gain of $285,000 in the first nine months of 2001. As a result of
lower oil and gas prices, we elected to proceed with the sale of several
non-economic, non-strategic properties rather than sustain continued operating
losses on those properties. This is in keeping with our ongoing practice of
systematically high-grading our base property holdings. Interest expense
increased as a result of the revolving credit balances assumed in the Madison
merger.

NET INCOME (LOSS) AVAILABLE TO COMMON SHARES

In the first nine months of 2002, we incurred a net loss of $3.8 million,
compared with net income of $2.7 million for the same period in 2001. Lower
results for the first nine months of 2002 were due to decreased oil and gas
prices compared with the first nine months of 2001, one-time transaction and
transition costs related to the Madison merger, higher operating costs of the
newly combined company after the addition of the Madison exploration staff, and
losses on the sales of selected properties.

OTHER COMPREHENSIVE INCOME

This item should be read in conjunction with Note 2 in the Notes to
Consolidated Financial Statements included in this filing.

The most significant element of comprehensive income, other than net income
(loss), is foreign currency translation. The function currency of our
operations in France is the Euro, and in Turkey the functional currency is the
Turkish Lira. The exchange rates used to translate the financial position of
those operations at September 30, 2002, were approximately US$ 0.99 per Euro
and US$ 0.61 per million Turkish Lira. The Euro rate at December 31, 2001, was
US$ 0.87 per Euro and US$ 0.69 per million Turkish Lira. These fluctuations
caused an unrealized loss of $183,000 for the first nine months of 2002. No
such charges existed during the first nine months of 2001 because we had no
foreign operations during that period.




|         |                                                          
|-------- | ---------------------------------------------------------
|ITEM 3  | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Other than the decline in the fair value of our commodity derivatives discussed
in Item 2  Managements Discussion and Analysis of Financial Condition and
Results of Operations, there have been no material changes from the information
provided in Item 7A of our Annual Report on Form 10-K for the year ended
December 31, 2001.

19



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##### Table of Contents






|         |                        
|-------- | -----------------------
|ITEM 4  | CONTROLS AND PROCEDURES



| |  | (a) Evaluation of Disclosure Controls and Procedures. The term
disclosure controls and procedures is defined in Rule 13a-14(c) of the
Securities Exchange Act of 1934, as amended (the Exchange Act). This
term refers to the controls and procedures of a company that are designed
to ensure that information required to be disclosed by a company in the
reports that it files under the Exchange Act is recorded, processed,
summarized, and reported within required time periods. Our Chief
Executive Officer and our Chief Financial Officer have evaluated the
effectiveness of our disclosure controls and procedures as of a date
within 90 days before the filing of this quarterly report, and they have
concluded that as of that date, our disclosure controls and procedures
were effective at ensuring that required information will be disclosed on
a timely basis in our reports filed under the Exchange Act.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | (b) Evaluation of Changes in Internal Controls. There were no significant
changes to our internal controls or in other factors that could
significantly affect our internal controls subsequent to the date of
their evaluation by our Chief Executive Officer and our Chief Financial
Officer, including any corrective actions with regard to significant
deficiencies and material weaknesses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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##### Table of Contents






PART II. OTHER INFORMATION




|         |                  
|-------- | -----------------
|ITEM 1  | LEGAL PROCEEDINGS

Other than the outcome of the Trinidad Arbitration proceeding and the Karak
Petroleum settlement agreement discussed in Note 8 in the Notes to Consolidated
Financial Statements included in this filing, there have been no material
changes to the information reported under Item 3  Legal Proceedings of our
Annual Report on Form 10-K for the year ended December 31, 2001.

From time to time, we are named as a defendant in other legal proceedings
arising in the normal course of business. In our opinion, the final judgment,
or settlement, if any, which may be awarded with any other suits or claims
would not have a material adverse effect on our financial position.




|         |                                                 
|-------- | ------------------------------------------------
|ITEM 2  | CHANGES IN SECURITIES AND USE OF PROCEEDS  None




|         |                                       
|-------- | --------------------------------------
|ITEM 3  | DEFAULTS UPON SENIOR SECURITIES  None




|         |                                                           
|-------- | ----------------------------------------------------------
|ITEM 4  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  None




|         |                         
|-------- | ------------------------
|ITEM 5  | OTHER INFORMATION  None




|         |                                 
|-------- | --------------------------------
|ITEM 6  | EXHIBITS AND REPORTS ON FORM 8-K



| |  | (a) The following exhibits are included herein:
| |  | -----------------------------------------------

|     |  |   |  |                                                                                                                                                                                                                                                                  
|---- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | - |  | Second Amended and Restated Bylaws of Toreador Resources
Corporation (previously filed as Exhibit 3.2 to Toreador
Resources Corporation Quarterly Report on Form 10-Q for the
quarter ended June 30, 2002, File No. 0-2517, and
incorporated herein by reference)
|     |  |   |  |                                                                                                                                                                                                                                                                  
|3.2  |  | - |  | Certificate of Designation of Series A-1 Convertible
Preferred Stock of Toreador Resources Corporation, dated
October 30, 2002.                                                                                                                                  
|     |  |   |  |                                                                                                                                                                                                                                                                  
|10.1 |  | - |  | Third Amendment to Loan Agreement dated August 7, 2002,
between Toreador Resources Corporation, Toreador Exploration
& Production Inc., Toreador Acquisition Corporation and
Tormin, Inc. and Bank of Texas, National Association.                               
|     |  |   |  |                                                                                                                                                                                                                                                                  
|10.2 |  | - |  | Fourth Amendment to Loan Agreement dated September 30, 2002,
between Toreador Resources Corporation, Toreador Exploration
& Production Inc., Toreador Acquisition Corporation and
Tormin, Inc. and Bank of Texas, National Association.                          
|     |  |   |  |                                                                                                                                                                                                                                                                  
|10.3 |  | - |  | Settlement Agreement dated June 28, 2002, and executed
August 29, 2002, between Tullow Pakistan (Developments)
Limited and Toreador Resources Corporation.                                                                                                       

21



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| |  | (b) Reports on Form 8-K:
| |  | ------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On August 14, 2002, we filed a Current Report on Form 8-K dated
August 14, 2002, with the Securities and Exchange Commission under Item
9. Regulation FD Disclosure to report certification pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 by Toreadors Chief Executive and
Financial Officers of the financial statements included in our Form 10-Q
for the periods ended June 30, 2002.
|
| | On September 23, 2002, we filed a Current Report on Form 8-K dated
September 18, 2002, with the Securities and Exchange Commission under
Item 5. Other Events to report the outcome of an arbitration hearing
related to our investment in Trinidad Exploration and Development, Ltd
and under Item 9. Regulation FD Disclosure to report the issuance of a
press release.                           




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                  |  |                                                                  
|----------------- |  | -----------------------------------------------------------------
|                  |  | TOREADOR RESOURCES CORPORATION,
Registrant                       
|                  |  |                                                                  
|November 13, 2002 |  | /s/ G. Thomas Graves III                                         
|                  |  |                                                                  
|                  |  | G. Thomas Graves III
President and Chief Executive Officer       
|                  |  |                                                                  
|November 13, 2002 |  | /s/ Douglas W. Weir                                              
|                  |  |                                                                  
|                  |  | Douglas W. Weir
Senior Vice President and Chief Financial Officer

22



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##### Table of Contents






CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, G. Thomas Graves III, President and Chief Executive Officer of Toreador
Resources Corporation certify that:



|(1) |  | I have reviewed this quarterly report on Form 10-Q of Toreador Resources
Corporation;                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|   
|(3) |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operation and cash
flows of the registrant as of, and for, the periods represented in this
quarterly report;                  
|   
|(4) |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | (a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|(5) |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent function):
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|(6) |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |                                                                                         
| |  | ----------------------------------------------------------------------------------------
| |  | Date: November 13, 2002                                                                 
| |  |                                                                                         
| |  | /s/ G. Thomas Graves III                                                                
| |  |                                                                                         
| |  | G. Thomas Graves III
President and Chief Executive Officer
(Principal Executive Officer)

23



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##### Table of Contents



CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Douglas W. Weir, Senior Vice President and Chief Financial Officer of
Toreador Resources Corporation certify that:



|(1) |  | I have reviewed this quarterly report on Form 10-Q of Toreador Resources
Corporation;                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|   
|(3) |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operation and cash
flows of the registrant as of, and for, the periods represented in this
quarterly report;                  
|   
|(4) |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | (a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|(5) |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent function):
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|(6) |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |                                                                                                
| |  | -----------------------------------------------------------------------------------------------
| |  | Date: November 13, 2002                                                                        
| |  |                                                                                                
| |  | /s/ Douglas W. Weir                                                                            
| |  |                                                                                                
| |  | Douglas W. Weir
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

24



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##### Table of Contents






EXHIBITS INDEX

|               |  |             |  |                                                                                                                                                                                                                                                                  
|-------------- |  | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description
|               |  |            
|3.1            |  | -           |  | Second Amended and Restated Bylaws of Toreador
Resources Corporation (previously filed as Exhibit
3.2 to Toreador Resources Corporation Quarterly
Report on Form 10-Q for the quarter ended June 30,
2002, File No. 0-2517, and incorporated herein by
reference)
|               |  |             |  |                                                                                                                                                                                                                                                                  
|3.2            |  | -           |  | Certificate of Designation of Series A-1 Convertible
Preferred Stock of Toreador Resources Corporation,
dated October 30, 2002.                                                                                                                                  
|               |  |             |  |                                                                                                                                                                                                                                                                  
|10.1           |  | -           |  | Third Amendment to Loan Agreement dated August 7,
2002, between Toreador Resources Corporation,
Toreador Exploration & Production Inc., Toreador
Acquisition Corporation and Tormin, Inc. and Bank of
Texas, National Association.                               
|               |  |             |  |                                                                                                                                                                                                                                                                  
|10.2           |  | -           |  | Fourth Amendment to Loan Agreement dated September
30, 2002, between Toreador Resources Corporation,
Toreador Exploration & Production Inc., Toreador
Acquisition Corporation and Tormin, Inc. and Bank of
Texas, National Association.                          
|               |  |             |  |                                                                                                                                                                                                                                                                  
|10.3           |  | -           |  | Settlement Agreement dated June 28, 2002, and
executed August 29, 2002, between Tullow Pakistan
(Developments) Limited and Toreador Resources
Corporation.